A Note from Chris
As a corporate credit union, we understand the importance of being a primary liquidity source for so many credit unions, and we align our balance sheet and strategies around your borrowing needs. We are pleased to be in a strong financial position to meet the investment and liquidity needs of both current and future members. If you have any questions about our financial position, investment diversification, or liquidity sources, please visit the Due Diligence section of our website.
I look forward to seeing many of you in a couple of weeks at our Annual Meeting. Corporate Central will be hosting our Annual Meeting at the Kalahari Resort & Convention Center in Wisconsin Dells during The Wisconsin Credit Union League’s Annual Convention on Thursday, May 11. All members of Corporate Central are welcome to attend. If you are unable to be there in person, we invite you to watch the meeting via live stream. Instructions for accessing the live stream will be emailed to all members prior to May 11.
Sincerely,
Chris Felton
President/CEO
Unleash the Beastro in You
Credit union technology platform forum.
Corporate Central will host an interactive session with the Beastro development team at The Wisconsin Credit Union League’s Annual Convention in Wisconsin Dells. The session will be held in the Kalahari Ballroom D/E on Thursday, May 11 from 1:30 p.m. to 3:00 p.m. CT.
Beastro is a single secure platform for credit unions to interact, engage, and transact their digital financial services and operations. Through enhanced security, business intelligence, and open API architecture, Beastro leverages a single application to redefine the credit union’s experience with Corporate Central, their business partners, and their members. Learn more and provide input and feedback in this interactive session with the Beastro development team.
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Stop By Our Booth
Corporate Central will be exhibiting at the Wisconsin Credit Union League Convention
We are excited to see many of you at the 2023 League Convention & Expo in Wisconsin Dells! Please stop by our booth (#130 & #229) to say hello! Knowledgeable staff will be available to answer any questions you have about our products and services or our CUSO offerings.
Did You Know?
Corporate Central publishes a blog called the CU Minute.
The CU Minute blog contains articles from Corporate Central and our family of CUSOs - InterLutions, QuantyPhi, and Think|Stack. Topics include employee benefits, innovative credit union solutions, investment management, and technology.
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Technology Solutions
Credit unions need qualified CISOs.
Hiring a virtual Chief Information Security Officer (CISO) is often a good strategy especially in a competitive hiring landscape. Not only can a virtual CISO provide expertise credit unions need to meet regulatory compliance requirements, but they can also offer high-level strategy and support that organizations can’t afford to have in-house.
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Employee Benefit Resources
Three strategies large credit unions can leverage to lower their medical insurance premiums.
Does your credit union have over 100 employees enrolled on your health plan? If so, there are meaningful strategies you can leverage to enhance your benefits and lower your premiums.
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Cost containment. Accessing and reviewing claims data should be a priority between HR leaders and their broker partners. If we can better understand what’s driving our costs up, we can develop containment strategies and communicate an effective approach to mitigate high-cost claims.
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Active management. Different networks and hospital systems will charge significantly different rates for similar healthcare procedures. For example, a lower-rated physician or network might charge three-times more to perform a knee replacement procedure than a higher-rated physician and network in a nearby city. Knowledge is power. Help your employees by giving them tools to better understand the costs, options, and overall quality of healthcare.
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Collaboration. Credit unions across the country are pooling their resources and purchasing insurance as a group. The I-Care Insurance Captive can reduce both the cost and risk of self-insurance models through aggregate buying power and healthier populations. Contact us to learn how your credit union can maintain autonomy and flexibility of plan designs while purchasing insurance at lower rates through proven and effective collaborative healthcare models.
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Financial Services Consulting
Which path will we take? Are you prepared?
The market enters May with a high degree of confidence that we will see the Fed hike short-term rates another 25 basis points to 5.25% to start the month. Looking beyond that we can see a fork in the road. One path is in line with a consensus opinion that the May hike will be the Fed’s last and will be followed by three 25 basis point rate cuts by January 2024. The other path is lined with expectation that the Fed will hold rates higher for longer, determined to bring inflation down to its 2.00% target before taking its foot off the brake.
The arguments for the likely rate path we will see going forward are strong on both sides. Fed funds futures and the inverted yield curve point to the path with a pivot to an accommodative Fed in the second half. Cracks seen in the financial system recently, tightening credit developing, and a pullback in the inflation rate offer credibility to that sentiment. The view that rates will follow the other path; however, is solid as well. It is led by statements from the Fed itself claiming they have no intention of lowering rates this year as they recognize that the inflation picture has improved, it remains well above target, and is the top priority. Strong employment data and resilient consumer spending justify that stance.
While analysts continue to argue about what rates are going to do, the question we need to ask ourselves is how our credit union will perform in all the possible scenarios. No one knows where rates are going, but we can use our ALM process and ensure that we can navigate any storms ahead. There are several things we should be doing today to make that happen, and QuantyPhi is ready to help guide you along the way.
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Back test the assumptions in your model. The 300+ basis point surge in rates the past year provides an excellent opportunity to see if your credit union reacted as the model projected. For most of us, we dragged our feet and raised loan rates much slower than the model projected. This could have proved costly but most of us also were very hesitant to raise deposit rates at all. The combination typically translated to improved margins but certainly raised some concern about the ALM model assumptions. Now that we have caught up on the loan side, tight liquidity is likely to push the cost of funds higher, squeezing those better margins we enjoyed. Recalibrating the assumptions of how we will change rates going forward is imperative if we want to rely on our ALM output to make solid strategic decisions.
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Take a hard look at non-maturity deposits. Most have seen some member interest in CDs as rates surged but generally in maturities of a year or less. Non-maturity deposits continue to represent the lion’s share of our liability side. A better understanding of your members’ rate sensitivity can provide insight into how they behave in the different rate scenarios letting you get a better handle on how your cost of funds will be affected. The liquidity shift in the market elevates the importance of this understanding to be confident you can weather any storms ahead.
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Look at the effect of yield curve twists in your analysis. We have seen the yield curve shift from a traditional positive slope to flat to our current inverted curve. Certainly, a return to a positive slope will help us when we add new loans to the books, but what will it do to our loan and investment portfolios already on the books? The yield curve slope is a big piece of the puzzle when looking at possible scenarios. A large shift can have a tremendous effect. Understand how your credit union would be affected and avoid surprises.
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Revisit your investment portfolio benchmark. The benchmarking process of syncing your investment portfolio to your balance sheet can significantly improve your ability to manage as you see markets and rates shift. It is important they are still in sync. Chances are high that the composition of your balance sheet has changed in the past year. The yield curve and interest rates certainly have. Up to date analysis on this front can allow you added confidence to stay on course going forward.
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Liquidity is king. Review and strengthen your liquidity policies and procedures. Explore all your funding options and have them available so you can choose the best fit when it is needed.
This seems like a great deal of things to undertake for a very good reason. They are. Fortunately, you have a trusted partner that can help with any or all of this. We have built a team and the tools to be there for you. We are here to help you and your credit union succeed.
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What’s Trending?
TheStreet’s finfluencers you should be following in 2023.
Back in the day, if you wanted to hear the thoughts of the most successful traders on Wall Street or the best budgeters ever to balance a checkbook, your only resource was the local bookstore. There, you could find self-help books about how to budget, save, and invest. But not all accounts are created equal. Your typical “how to invest for dummies” may not account for a lot of differences in how you experience the world. And if typical financial gurus don't quite fit your style, you might find exactly what you're looking for in a new type of personality: the finfluencer.
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Credit Unions Connect
Stories that exemplify the movement
Building an inclusive playground.
Lone Star Credit Union presented the City Council with a $5,000 sponsorship towards the City Lakes Park Inclusive Playground. They are thankful for local businesses that recognize the need for this facility and are happy to help get it accomplished.
Keeping our Earth clean.
Members of the Marathon County Employees Credit Union team celebrated Earth Day with their families at the Ghidorzi Green + Clean event. Volunteers removed 4.16 tons of trash from the greater Wausau community for a fresh start to spring.
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What’s New and Who’s Who
Shannon Cate has been promoted to Manager Member Services.
We are excited to announce that Shannon Cate, NCP has been promoted to Manager Member Services. Shannon is responsible for providing operational support of products and services to enable delivery of superior member service. She works proactively with member credit unions, member vendors, Corporate Central partners, and appropriate Corporate Central employees to coordinate efforts for all new member product and service implementations. Shannon joined Corporate Central in September 2014 as a Member Services Representative. In December 2019, she was promoted to Member Services Specialist. She brings years of experience from within a full-service credit union along with customer service and data entry positions. She also holds an associate degree in business, and she received her National Check Professional (NCP) accreditation in 2022. Congratulations, Shannon!
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Malisha Yang has been promoted to Member Services Specialist.
We are also pleased to announce that Malisha Yang has been promoted to Member Services Specialist. Malisha is responsible for facilitating robust delivery of superior member service and proactive relationship development. She serves as primary support for all new member onboarding processes, assists with account user authority, and provides support for member solutions introductions and onboarding/implementation. Malisha rejoined Corporate Central as a Member Service Representative in June 2017. She brings several years of credit union experience including positions in member services, teller, new accounts, ACH, accounting, and collections. She has served on the WACHA Planning Committee, served on the Cream City Chapter board, crashed Filene’s Big Bright Minds in 2018, participated in several YP events including HYPE at the Convention and HYPE at the GAC in 2018 and many bootcamps. She earned her ACH Certificate through MACHA in December 2022. Congrats, Malisha!
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Learn More About Our Team